Insurance protects individuals and organizations from various expenses. For example, many people purchase car and health insurance to guard against the high costs of car accidents and healthcare. Commonly, insurance agreement provisions govern the benefits owed for a particular claim. The process of determining benefits for a particular claim is known as “claim adjudication.”
Large insurers receive countless claims each day. Despite technological advances, however, claim examiners often process many of these claims by hand. While examiners often become reasonably consistent in their interpretations of agreement provisions, adjudication of a claim sometimes depends as much on the desk that the claim landed on as the merits of the claim. In addition to differing interpretations of provisions, processing claims by hand adds administrative expense and delay, and can introduce human error into the claims adjudication process.
The healthcare industry, plagued by an expensive, slow-moving infrastructure, suffers many of the claim adjudication problems described above. A procedure as simple as a check-up can implicate any number of coverage agreements between different entities in the healthcare landscape. Many of these agreements include hundreds of different coverage provisions, many of which reference one another. Additionally, some provisions reference provisions in a different agreement, making the task of determining a claim adjudication outcome even more difficult.
FIG. 1 illustrates the myriad of contractual relationships potentially implicated when a patient receives medical care from a practitioner. As shown, a purchaser 110, such as an employer, enters into a plan contract relationship with a healthcare company 112. Provisions in the plan contract specify coverage provided to subscriber 104 members 102 (e.g., employees) for medical services. A plan may also cover members 102 other than employee's such as an employees family members and dependents.
Typically, when a member 102 receives care from a practitioner 106, the practitioner 106 submits a request for reimbursement to the healthcare company 112. The reimbursement owed the practitioner 106 may be governed by a provider contract 116. The provider contract 116 may apply to a group of practitioners, such as practitioners at a particular hospital or clinic.
Instead of a direct relationship with a health care company, providers 108 may belong to a provider network 114 such as an HMO (Health Maintenance Organization). The provider network 114 may agree to provide healthcare for the health care company 112 in accordance with a provider contract 119. The provider(s) 108, in turn, may agree to provide healthcare services for the provider network 114 in accordance with a provider sub-contract 118. A determination of reimbursement ultimately owed a practitioner 106, in this example, hinges on both the provider contract 119 provisions and the provider sub-contract 118 provisions.
Due to this web of agreements, providers 108 sometime spend months awaiting payment, uncertain whether they will receive full or partial reimbursement, if any. Additionally, the documentation provided with payments often lacks much in the way of explanation. For example, large provider groups 108, such as hospitals, often receive checks for millions of dollars, accompanied only by a terse description. Weeks or months later, these hospitals may receive hundreds of pages of computer printout often requiring a claim-by-claim investigation to determine an accounting of the amount received or withheld. Similarly, health plan members 102 often receive bills for an outstanding balance months after a visit.